Canada’s job market remains tight, and the unemployment rate among immigrants is historically low.
That’s the key takeaway from Statistics Canada’s most recent labour force survey for newcomers arriving soon in this country.
Older Canadians are retiring
August saw Canada record the lowest jobless among newcomers on record.
Why is this happening?
Well, increasingly Boomer and GenX Canadians are retiring and leaving the workforce. Immigrants are filling these jobs – and that’s an important trend supporting labour force growth.
India is the main source for newcomers
In fact, there were fewer unemployed people (989,000) than job vacancies (1,038,000). That’s a first since 2015.
With an aging native-born labour force and low fertility rates (approximately 1.4 births per woman in 2020), a steady influx of newcomers is vital for the Canadian economy. Canada continues to suffer a shortage of skilled workers despite attempts to attract immigrants.
India is the No. 1 source country of new immigrants. In the first half of 2022, 68,280 Indians received Canadian permanent residence. That’s 29 percent of all immigrants to Canada.
The public sector was hit by job losses
Overall, the Canadian unemployment rate was 5.4 percent in August, which was the first increase in seven months. In July it was 4.9 percent in July. That’s the lowest unemployment rate since 1976.
StatsCan’s Labour Force Survey for August said the Canadian economy lost 40,000 jobs that month with the losses occurring in the public sector. That marked the third consecutive month of declines, with a total of 114,000 jobs lost over that three-month period.
According to the survey, job gains in professional, scientific and technical services were offset by losses in education services and construction.
Has the economy hit a pothole?
Employment fell in the provinces of British Columbia, Manitoba, and Nova Scotia but rose in Quebec.
BMO senior economist Sal Guatieri told Canadian Press that “the economy was doing very well up until a couple of months ago and now seems to have hit a pothole.”
But is that accurate?
Scotiabank’s Derek Holt urged caution in looking at the job losses for August.
The job market remains tight
“The quality of the data behind the job loss should be treated with care,” said Holt. “That’s because the 40k drop in total employment was heavily driven by a 50k drop in education sector jobs. Where did all the teachers go? Possibly nowhere other than back to school as it may just be a data distortion.”
“The job market remains tight,” said Holt, who is vice president and head of Capital Markets Economics at Scotiabank.
Good news for newcomers
That’s good news for newcomers seeking jobs. The survey notes that more than a third (38 percent) of businesses are expecting that finding skilled workers would be a challenge for the rest of this year.
Canada is currently on track to meet or exceed its target of 431,645 new immigrants in 2022.
Meanwhile, the Bank of Canada is watching the economy closely as it continues its strategy of raising interest rates to quell inflation. In early September, the central bank hiked its benchmark interest rate by three-quarters of a percentage point to bring it to 3.25 percent.
Inflation remains a concern
A recession, or economic slowdown, is anticipated and the bank has said inflation is still too high for the cycle of rate hikes to end.
CIBC senior economist Andrew Grantham told Canadian Press that “with one more labour force survey before the (central bank’s) October meeting, it still seems likely that at least one more rate hike will be in store before a pause is seen.”
*The job losses in August were primarily concentrated among women aged 15 to 24 and people between the ages of 55 to 64, while the labour force participation rate held steady overall.
Employers face challenging talent search
Statistics Canada warned that employers are likely to continue to face recruitment challenges as many Canadians reach retirement age. In August, 307,000 Canadians had left their job to retire in the last year, compared with 233,000 a year ago.
The report also looked at the unemployment rate among immigrants who arrived in Canada in the last five years. The unemployment rate for this group was 7.6 percent, lower than any in August since comparable data became available in 2006.
Still, it remains higher than the overall unemployment rate in Canada.
Nearly a million jobs unfilled
Newcomers accounted for 875,000 people within the Canadian labour force in August, largely clustered in popular Gateway cities such as Toronto and Montreal.
The number of vacancies for the April-May-June period was up 4.7 percent or 45,000 compared with the first quarter. It was also up 42.3 percent or 296,500 compared with the second quarter of 2021.
According to Canadian Press:
- The health care and social assistance sector had 136,100 job vacancies in the second quarter compared with 135,300 in the first quarter. That’s up 28.8 percent or 30,500 on a year-over-year basis.
- The number of vacancies in the accommodation and food services sector rose 12.7 percent or 16,800 on a quarter-over-quarter basis to 149,600 in the second quarter.
- There was also a record high number of vacant jobs in the professional, scientific and technical services sector at 74,600, up 7.9 percent from the first quarter.
Job vacancies rise in Ontario
Job vacancies rose in six provinces between the first and second quarters of 2022. Ontario saw the largest increase in job vacancies between the first and second quarters of 2022, rising 6.6 percent to a total of 379,700 job vacancies. Nova Scotia saw a rise of 6 percent, and British Columbia, Manitoba, Alberta and Quebec saw hikes between 5.6 percent and 2.4 percent.
The August labour market survey also shows that the percentage of workers looking to leave their job was growing. StatsCan reports that 11.9 percent of permanent employees were planning to leave their jobs within the next 12 months. That’s almost double the rate in January.
And among low-income earners, that rate was higher. Among workers whose average hourly wages were in the bottom 20 percent in August, nearly one in five say they’re planning on leaving their job